Air Canada reported an operating loss of $146 million for the fourth quarter of 2008 compared to operating income of $72 million in the fourth quarter of 2007, a difference of $218 million. Fuel expense increased $177 million or 29% compared to the fourth quarter of 2007. A net loss of $727 million in the fourth quarter of 2008 included net losses on foreign exchange of $527 million. This compared to net income of $35 million in the fourth quarter of 2007 which included net gains on foreign exchange of $20 million.
For 2008, Air Canada reported an operating loss (before a provision for cargo investigations) of $39 million compared to operating income of $433 million in 2007. Fuel expense increased $867 million, or 34%, to $3.4 billion in 2008. Passenger revenues of $9.7 billion in 2008 increased $384 million or 4% mainly due to increased fares and fuel surcharges to partially offset significantly higher fuel prices. Excluding fuel expense, unit cost increased 1.7% from 2007. The airline recorded a net loss of $1,025 million compared to net income of $429 million in 2007. The net loss for 2008 included net losses on foreign exchange of $655 million and non-cash mark-to-market gains on financial instruments of $92 million which were largely related to the fair value of fuel derivatives.
